Mitch Daniels is shaking up higher education

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When former Indiana Governor and Purdue University President Mitch Daniels was on a panel for a group of education writers a few months ago, he sounded like one of those football players that his university puts on the field each autumn – downplaying his dramatic new initiatives at the school the same way a quarterback might diminish his role in a muddle of modesty after a big game.

“At Purdue we’ve done a few things. I don’t tout them, I don’t recommend them,” he said after the moderator ticked through a list of accomplishments. “We’re not trying to suggest that anything we’ve done should be generalized. We’re just trying to do right by one institution.”

But Daniels has made big attention-getting plays in his five years as president, creating fans and sharp critics, and touching every segment of the school, from the delivery of books and burgers to big budget items that affect its bottom line.

For starters, he is a big fan of data — and now he's using it to help students afford attendance to the institution.

Daniels believes universities need to change or they’ll become obsolete, as they continue to face a generation of young people who too often aren’t college-ready, don’t think the soaring cost will pay off, or exploring alternatives such as online degrees or other employer-based training. For this reason, he's turned to data to start introducing innovative practices at Purdue, help students learn more online and in the classroom, and offer pathways to success in the job market.

In a letter to the university community this year, he put it this way:

“Predictions persist of a sectoral disruption akin to that which hit the newspaper, photography, department store, record and bookstore businesses and others. One particularly pungent critique forecast that residential colleges would become “the debutante cotillion of the 21st Century,” a quaint artifact of enduring attraction only to a cloistered, almost irrelevant few. At Purdue, we do not discount these alarming possibilities, but we do not accept their inevitability. We view the current challenges to higher ed as real and the criticisms as in many cases legitimate. We believe that a posture of denial, obstinately insisting on the superiority of the model just as it is, would be both irresponsible and dangerous.

But neither do we accept that the residential university experience is destined for the creative destruction boneyard. Modernized and enhanced, we believe strongly that Purdue and its sister schools can still offer a compelling case to ambitious and talented young people decades from now. That case must be built around provable, unquestionable value that cannot be replicated in even the most advanced alternative modes.”

The Boilermaker bottom line to consider costs

Key data from a landmark research collaboration with Gallup also reinforced Daniels’ view about one other issue.

"Debt hinders our national economy just as it hinders the individual life prospects of students who borrow too much," he says. "It’s past time for leaders in higher education to restrain costs and make sure that our doors remain open to all students who meet our standards.”

And he's been doing more than just offering the lip service. Daniels has kept tuition at 2013 levels, cut the cost of room and board and reduced student loans by 30% while dropping the loan default rate to 1% — with he national average falling at about 7%. To follow, he initiated a first-of-its-kind arrangement with Amazon that reduced the price of books by 30%.

One of his more visible moves has been the "Back a Boiler” income sharing program, a creative financing alternative that experts say hasn’t been seriously attempted by a college since a failed attempt by Yale in the 1970s. ISAs usually are funded investors, but the Purdue endowment is backing these.

“We continue to look for every way to send our graduates out with lower debt obligations,” Daniels says. “ISAs assure a manageable payback amount, never more than the agreed portion of their incomes. Best of all, they shift the risk of career shortcomings from student to investor.”

ISAs provide college funding to students who, based on their major, agree to pay back a percentage of their future income for a specific period —interest-free and capped at 2.5 times the original amount. Students who earn less than $20,000 aren’t expected to repay anything.

Using a Purdue calculator, a chemical engineering student borrowing $14,000 would pay about $21,000 over seven years, about $2,600 less than with a private loan. A senior majoring in economics who took out $32,000 from the program would pay about 11% of their income over 100 months, or about $50,000, while a traditional loan would cost about $5000 more.

“These college-backed ISAs have the brand of the college behind them, and it’s the college saying ‘We believe in our programs, we believe in our education, and we believe you’ll be better for it as a cohort,'" Zakiya Smith, strategy director of the Lumina Foundation and a former education policy adviser for President Obama, told Atlantic magazine. “It’s essentially colleges putting their money where their mouth is.”

At a tech summit earlier this year, Beth Akers, a policy analyst at the Manhattan Institute and an advocate for ISAs, said if students are well informed about their options in such arrangements, the deals might help hold schools accountable for producing well-trained students.Though, critics have said the programs are a type of “indentured servitude”, and that they may unfairly make it harder for students in less lucrative fields to get backing or may be difficult for students to understand.

According to Purdue spokesman Brian Zink, about 270 students in 80 majors will participate in the program this year, getting $3.5 million, nearly double the number from last year and for the first time including sophomores.

Targeting lucrative skills in the classroom

Daniels wants to tackle the quality of education at Purdue, he says, and focus on improving its STEM programs and expanding research opportunities so students have real-world skills for the fields that need them.

“Google doesn't care,” he says about degrees. “They want to know if you can code.”

Purdue University

And again, Daniels has followed the statement with action. With regard to STEM the school made several moves, with the institution, among other things:

Increasing the number of STEM students by 15% in five years, adding 2,000 students and 100 faculty members in the engineering program alone (the top enrollment in the country) and doubling the size of the computer science program and the number of applicants.

Helping assure 100% of computer science graduates got employment last year, earning an average of $84,000, above the national average of $54,000

Transforming the tech college into the Purdue Polytechnic Institute, with 11 satellite campuses and now an experimental technology high school.

Announcing plans for a 980-acre Purdue Research Park Aerospace District, housing public and private aerospace research facilities

With the education college, developing a “STEM goes Rural” program that provides stipends for tech teachers in high school in high-need high schools.

The school has also bolstered its research presence in the last five years, claiming its raised sponsored research awards to $403 million, increasing patent awards by 100% and sponsoring 27 startups from its intellectual property, a 500% increase.

To follow this, Daniels has also asked faculty to increase rigor and as part of their tenure agreement take on interns or mentees, and has expanded course offerings and raised enrollment by 19% in the summer, in the hopes of developing a year-round trimester system that could cost both students and the school less.

A program called Impact aimed at a "student centered teaching," is growing, especially for big, foundational courses. Some 180 instructors have applied and gained acceptance into the cohort, which has restructured 200 courses, having them use more small groups and discussion and pushing instructors to examine how relevant and accessible their materials are. It incorporates new ideas such as flipped learning, where students get lectures online and more personal attention in the classroom, along with other project-based learning, where students can apply information to a real problem.

Purdue is also increasingly trying competency based learning, especially in STEM courses, where students advance based on knowledge and achievement not just completion of required classes.